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Costco Considers Opening Iceland Branch

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Costco Considers Opening Iceland Branch

Costco, the North American member-exclusive warehouse club, has expressed interest in opening both a warehouse superstore and a gas station, or multi-energy station, in Iceland.

Costco is a warehouse club, or wholesale store, which sells items at bulk prices, and in turn requires shoppers to be club members and pay an annual fee. They currently have stores in two other European countries, Great Britain and Spain.

Two potential locations have been named: the Korputorg shopping complex on the outskirts of Reykjavík, and Kauptún, a shopping square in Garðabær, a town in the capital area, ruv.is reports.

“I like the idea of bringing the store to Iceland, first and foremost because then we could expect prices for consumer goods, which are much too high, to go down. And of course it wouldn’t be a bad thing if it would open in Garðabær,” said Garðabær Mayor Gunnar Einarsson.

Garðabær has already approved the potential location for the superstore in its jurisdiction, and is currently awaiting drawings and further details regarding a multi-energy station, which would supply gasoline, electricity and possibly methane, visir.is reports. Half the station would service fossil-fueled vehicles while half would only supply renewable energy.

The Reykjavík City Council has approved the Korputorg location for both a superstore and multi-energy station.

Despite positive feedback from council planning committees, there are some serious legal issues regarding the store in its proposed form. Costco representatives have filed with the appropriate government agencies for several exceptions to Icelandic laws governing both importers and retailers.

Firstly they have requested a special license to import fresh, North American meat, while all import of fresh meat is forbidden. They have also asked to be allowed to sell pharmaceutical drugs in a facility shared with a non-medical establishment, which is in violation of the Icelandic drug code. Costco also wants to sell alcohol, but alcohol can currently only be sold at government-operated stores. Lastly they have asked for an exception regarding laws concerning food labels, which are much more stringent in Iceland than in the United States.

In return for these concessions Costco has entertained the possibility of selling Icelandic fish in their 600 overseas stores.

“I can see how this could work, there are obviously certain things that must be figured out, but while [Costco] is showing us this level of interest as I feel they are doing, then we’re willing do everything in our power to clear their way,” said Minister of Industries and Innovation Ragnheiður Elín Árnadóttir, who has met with Costco representatives multiple times.

“This would presumably lower prices, or at least that’s what I hope for, and additionally increase product diversity, ” she added.

Head of the Federation of Icelandic Industries, Guðrún Hafsteinsdóttir, has expressed concern that the government is so willing to bend rules that Icelandic businesses have been trying to have amended for years, such as the government monopoly on the sale of alcohol, for a foreign retail chain.

If there will be any legal amendments made to accommodate Costco’s arrival, those changes must be applied equally across the board.

“In my opinion a new store opening in Reykjavík, whether it is American or not, must abide by Icelandic law. It isn’t okay to bend the rules just for them,” said Guðrún to ruv.is.